The Home Equity Theft Reporter

Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.

Saturday, July 02, 2016

Hospital Expansion Causes Closure Of Its Nursing Home Wing, Forcing Dispersal Of 23 Vulnerable Senior Citizens To Other Facilities

In Saratoga Springs, New York, The Saratogian reports:

Saratoga Hospital plans to close its nursing home by the end summer to create more space for inpatient care.

In 2007, the hospital’s nursing home capacity was cut in half from 72 to 36 beds.

Twenty-three current residents will be affected by the closing.

“As difficult as this decision was to make, we believe it is the right decision,” said Angelo Calbone, hospital president and chief executive officer. “We have been working with our local long-term care facilities to identify how we can best help our residents find new homes. Our discussions with these facilities have been encouraging. We believe we can find the right place for each and every resident. We are committed to help in any way we can during this transition.”

The hospital began notifying families of nursing home residents about closure plans on Tuesday.

Barbara Flass of Malta said her 93-year-old mother, a dementia patient and cancer survivor, has gotten exceptional care during her four years at the nursing home. However, Flass said she’s concerned about the impact of moving her mother to a new setting at her advanced age.

“She’ll be waking up in a strange bed, surrounded by strange people,” Flass said. “The people who work there are devastated as well the families of residents. It’s like a family home, not a nursing home.”

The nursing home employs 44 people. Calbone said workers will be offered other positions within the hospital, or it will help people find employment at other healthcare facilities. If needed, other employers will be invited to hold a job fair for hospital workers, he said.

Aging Building In Need Of Unaffordable Upgrades, Shrinking Medicare & Medicaid Reimbursements Lead To Another Nursing Home Shutdown, Forcing Dispersal Of 30 Elderly, Poor Residents To Other Facilities Throughout State

In Winthrop, Maine, the Kennebec Journal & Morning Sentinel reports:

A nursing home in downtown Winthrop closed [last week], and the 30 residents who were staying there have been transferred to different long-term care facilities around the state, said Edward Hunt, who owns and administered Winthrop Manor Long Term Care and Rehab Center.

The Western Avenue facility closed for a mix of reasons, Hunt said. The building was in poor shape and required considerable investment, he said, and the federal Medicaid program — known as MaineCare — was not reimbursing the full amount to house and care for residents there.

“I never made any money in four or five years,” Hunt said. “It was difficult. Unfortunately, MaineCare doesn’t pay enough. For every dollar I spent, I got about 90 cents back.”

While Winthrop Manor has housed an average of 40 residents over the last five years, Hunt said he had limited enrollments in the last year of operation, knowing that he eventually would close the nursing home.

The 30 residents who remained this month were transferred to facilities in different parts of the state Monday, Hunt said, including Lewiston, Farmington, Madison and the Brunswick and Bangor areas.

***

Hunt, who has owned the home for almost 12 years and also runs an assisted-living facility in Biddeford, said he is looking to the sell the Winthrop building. A former farm building, it was first converted to a care facility in 1956 and was showing its age in recent years. At least one furnace and two commercial laundry machines were 25 years old and in need of replacement, Hunt said.

***

The challenge to Hunt’s business going forward, he said, was that shrinking reimbursements for Medicaid and Medicare services would not cover the upgrades needed to maintain his 46-bed home.

“I don’t blame anybody,” he said of his reasons for closing. “But for us, it’s too little too late.”

The Board of Trustees at New London Hospital voted unanimously [] to close the William P. Clough Extended Care Center by Oct. 1, giving hospital officials 3½ months to find alternative arrangements for the 31 residents still living at the nursing home.

The Valley News reported last month that the trustees were expected to act on the issue at Thursday’s meeting, following 18 months of work by a hospital committee assessing the future of the 45-year-old nursing home, which New London Hospital officials said loses $1 million annually.

About 35 staff members employed by the 58-bed facility, which is licensed for both long-term care and skilled nursing, are expected to be impacted by the closing, and hospital officials said they are looking to help them find new jobs, either within the hospital, the affiliated Dartmouth-Hitchcock system, or with private nursing homes that may take some of the residents.

New London Hospital President and CEO Bruce King said the closing of the nursing home follows similar actions taken in recent years by Alice Peck Day Memorial Hospital in Lebanon, Mount Ascutney Hospital and Health Center in Windsor, and a hospital in Exeter, N.H.

“Basically, the long-term care reimbursement from the state of New Hampshire for Medicaid patients, which is the vast majority of our patients, does not cover the cost of the care,” King said. “We’ve tried to be transparent that it is not sustainable for an institution to be losing $1 million a year from operations in providing long-term care.”

The Clough Center is embedded into the hospital itself, occupying much of the second level of the four-level hospital building. The nursing home opened in 1971, and hospital officials also have said that besides losing money, the space needs capital upgrades, such as HVAC improvements and new windows.

Residents of Church Street Manor in Gainesville have received the notice before. By now, it serves mostly as a reminder that they may one day have to move.

And that's a daunting prospect for many living there given the shortage of affordable housing across Hall County.

The 54-unit subsidized apartment complex houses elderly residents living on fixed incomes covered by Social Security and disability checks.

The notice arrived again recently with these words bolded: “This letter is to notify you that we do not intend to renew the current Section 8 contract when it expires.”

The complex across Jesse Jewell Parkway from the Northeast Georgia Medical Center could be redeveloped at some point in the coming years, though nothing is immediate.

“Nothing has changed,” said Frank Norton Jr., president and CEO of The Norton Agency real estate firm who manages the property. “It is simply a technicality.”

Norton said the federal Department of Housing and Urban Development prefers that a five-year Section 8 renewal agreement be signed to ensure long-term subsidized housing at the complex. But the property owners want to go year-to-year instead, which prompted them to send the required notice.

Owners have 120 days prior to the next expiration date of May 2017 to either renew the Section 8 contract for another year or opt out.

Friday, July 01, 2016

David v. Goliath II: 81-Year Old Widow Maintains Upper Hand In Standoff w/ Timeshare Developer That Screwed Up By Illegally Demolishing Nearly An Entire Townhouse Complex Without First Obtaining Title To The Senior's Vacation Home; Acting Without Valid Permit, Outfit Now Sees Its $24-Million, 180-Acre Project Being Held Up In Indefinite Limbo

In Orlando, Florida, the Orlando Sentinel reports:

A testy meeting between the family of an 81-year-old widow and the timeshare company that wants to bulldoze her condo ended without a resolution [last week].

Family members for Julieta Corredor, who owns the last-remaining unit from the former Sonesta Villa Resort, told an Orange County planning committee she is not yet ready to accept the compromises offered by Westgate Resorts.

"I don't think they have legal permission from the county to build what they're building or demolish what they've demolished," said William Corredor, Julieta's son.

Westgate is planning a $24-million, 180-acre project on the land, including Julieta Corredor's unit. Everything else from the former complex already has been torn down.

Developers seeking permission from the county for projects are required to certify they own all properties included in their plan or have agreements with authorized agents, but Julieta Corredor has steadfastly refused to sell.

William Corredor on Wednesday argued his mother has no obligation to compromise to make way for Westgate's project.

Julieta Corredor paid $154,000 with her late husband to buy the condo 30 years ago as a vacation home, according to the family.

Westgate offered $150,000 to buy it — more than double its current value, the developer has said.

"If she doesn't want to sell to them, she doesn't have to sell to them," William Corredor said Wednesday.

In addition to trying to buy the condo, Westgate has also offered to swap it for one nearby or repair and build around it. Jim Hall, a planner representing Westgate, said Westgate has also offered to build a new condo on the same lot.

Corredor's unit was damaged by bulldozers tearing down the surrounding complex.

"The end result would be there would be a brand-new unit, with brand-new carpet and brand-new walls and a brand-new roof," Hall said.

However, Brent Siegel, an attorney for the Corredors, said Westgate's latest proposal lacks setbacks for the rebuilt townhouse. Its front door would open up to the curb stop for a parking space, he said.

William Corredor argued the county should be penalizing Westgate, rather than urging his mother to accept a compromise.

But Planning Administrator John Smogor countered that the Corredors were asking the county to wade into a civil dispute. He acknowledged the developer had done wrong when it demolished most of the complex with an invalid permit.

He urged the Corredors to consider a compromise, noting that the county's development review committee may approve a revised plan at its July 13 meeting that would allow Westgate to build around their stranded unit.

"We're here to try to resolve this issue. If this is something that can't be resolved, then we can stop now, and you can go and sue them, and they can sue you back, whatever," Smogor said. "We don't want to be in the middle of this."

That episode hilariously depicted city officials and the fits they were having when discovering that there was one remaining resident in an entire 15-square block neighborhood condemned and undergoing demolition (in connection with the construction of the approach to the George Washington Bridge off of the Cross Bronx Expressway, a part of master builder Robert Moses' infamous urban renewal project that displaced thousands of residents in the Bronx throughout the 1950s & 1960s).

That resident, a sweet (but shrewd), elderly widow named Mrs. Bronson (played by famed star of Yiddish theater and film, Molly Picon) not only avoided eviction but, because of her knowledge of "the system," was proving to be a bit more difficult than they expected to boot from her (presumably rent-controlled) apartment, thereby threatening to indefinitely hold up the entire construction project.

Surprisingly, it was Toody & Muldoon who stumbled into a solution to gently persuade Mrs. Bronson to leave her home of 40 years and allow the Bronx urban renewal project to continue.

[D]avid Gotterup pleaded guilty at the federal courthouse in Brooklyn, New York, to conspiracy to commit wire fraud by defrauding distressed homeowners in a loan modification scheme. When sentenced, Gotterup faces up to 30 years in prison, as well as restitution, criminal forfeiture, and a fine.

***

According to court filings and facts presented at the guilty plea proceeding, from 2008 to 2012, Gotterup and his co-conspirators made a series of false promises to convince more than a thousand distressed homeowners seeking relief through government mortgage modification programs to pay thousands of dollars each in advance fees to numerous companies owned or controlled by Gotterup, including Express Modifications, Express Home Solutions, True Credit Empire, LLC, Green Group Today, Inc., The Green Law Group, Inc., and JG Group.

Among other things, Gotterup directed telemarketers and salespeople to lie to distressed homeowner victims by telling them that they were preapproved for loan modifications and that they were retaining a law firm and an attorney who would complete their mortgage relief applications and negotiate with the banks to modify the terms of their mortgages.

Contrary to these representations, Gotterup and his co-conspirators did little or no work in connection with these fraudulently induced advanced fees. Gotterup was arrested in October 2015 and remains incarcerated.

Thursday, June 30, 2016

Central Florida Contractor Stiffs Roofing Supply Company, Leaving Dozens Of Paid-In-Full Customers With Liens Slapped On Their Homes By Outfit They Never Heard Of

In Pasco County, Florida, WFTS-TV Channel 28 reports:

70 and counting. That’s how many Pasco County homeowners investigators said a roofing company ripped off.

“This is supposed to be my future home. And it’s like, are you kidding me? I have a lien against it,” said Joan Joseph.

Joseph is still furious after paying thousands for a new roof, only to find a lien on her Hudson home. Joseph said she went to Ike’s Roofing to do the job and she was happy with the work. “I had no complaints about my roof. Beautiful job,” she said.

But after paying Ike’s the balance, she said a company she never heard of, Suncoast Roofers Supply, put a lien against her home.

According to SRS, Ike’s and owner John Iacovino never paid them for the materials used for the new roof.

“He’s a thief as far as I’m concerned,” said Joseph.

Under Florida law, companies can go after homeowners for unpaid supplies, even if the contractor was paid in full.

“Basically until you get the full waiver of lien, don’t pay the contractor that remaining balance. Because if that balance doesn’t get paid, you need to pay it directly to the supplier, that way you don’t get a lien placed on your property,” Hill said.

In just three weeks Hill said he’s found evidence of least 70 victims. Many of them are elderly.(1)

But to make matters more complicated, Ike’s Roofing owner was arrested last year after deputies found him passed out behind the wheel of his work truck. Also in that truck, a glass pipe, syringes, and prescription pills.

Investigators said Iacovino is now in rehab facility and will face arrest when he gets out.

When we showed up to Ike’s Roofing Friday, we found the gate locked and a sign that said “Keep Out. This is not Ike’s Roofing.”

Meanwhile Joan got an attorney and said the supply company did drop the lien on her home. But she still wants Ike’s owner to be held responsible. “Basically he stole my money and that’s just wrong to do,” she said.

An attorney for the supply company said SRS is suing Ike’s Roofing for all the unpaid bills.

(1) The Florida Homeowners' Construction Recovery Fund is a fund of last resort that is available to a natural person [ie. a human being, as opposed to a business entity - corporations are not considered to be "people" for purposes of administering this fund] who has suffered monetary damages by the financial mismanagement or misconduct of a contractor, and who has exhausted all other resources of payment. The Construction Industry Licensing Board makes the determination of eligibility for an award. For more:

70+ Ways To Lose Your Real Estate Due To Unknown/Undisclosed Title Defects: Hidden Hazards & The Need For Title Insurance Protection

From a reference article put out by the title insurance underwriter First American Title:

A forgery 50 years ago; a deed executed under duress; bigamy that went unknown; an error by a clerk in the county recorder’s office; a misapplied tax payment— these are but a few of the hidden “title defects” that could cause you to lose your property. And, even if you don’t lose your property altogether, title problems could make it impossible for you to sell.

You don’t want a problem that occurred long before you bought your property to deprive you of ownership or your right to use or dispose of it. And you don’t want to pay the potentially high cost of defending your property rights in court.

An Owner’s Policy of title insurance is your best protection against potential defects that can remain hidden despite the search of public records. A Loan Policy of title insurance also exists to protect your mortgage lender’s interest.

-------------------------------

Among the more than 70 hidden hazards that a title insurance policy provides protection against are:

Forged deeds, mortgages, satisfactions, or releases

Deed by person who is insane or mentally incompetent

Deed by minor (may be disavowed)

Deed from corporation, unauthorized under corporate by-laws or given under falsified corporate resolution

Deed challenged as being given under fraud, undue influence, or duress

Deed following nonjudicial foreclosure, where required procedure was not followed

Wednesday, June 29, 2016

NYC Home Title Hijacker Cops Guilty Plea That Calls For 12 Months Jail Time For Using Forged Deed To Swipe Unoccupied House; Elderly Victim Says Nearly $500K In Family Heirlooms Were Destroyed

In Jamaica, Queens, the New York Daily News reports:

A Queens ex-con pleaded guilty [last week] to stealing an elderly woman's house out from under her.

Darrell Beatty, 51, pleaded guilty to criminal possession of a forged instrument for using a phony deed to swipe Jennifer Merin's Laurelton house out from under her.

As a result of the plea deal, he'll get even more free housing — it calls for him to get a year in jail.

Merin, 72, said that's not enough time. "I'm glad he's going to jail. He deserves to go to jail but I think that the sentence was too brief," she told the Daily News after Beatty's plea. "He lived in my house for longer than he will be in jail and he'll be out on the streets again."

Queens District Attorney Richard Brown acknowledged that Merin had been put through hell.

"The victim of this complicated con was thrown into a living nightmare when she discovered that her family's home — filled with the precious memories and mementos of three generations — was being inhabited by squatters who had locked her out," Brown said.

"Fortunately, the property now has been returned to its rightful owner and the defendant, in admitting his guilt to possessing a fake deed which transferred the property to him, faces time behind bars for his crime."

The brick Tudor style house had been left to Merin when her mother died. Her family had lived in it since it was built in 1930.

Merin, whose primary residence is in Manhattan, realized something was wrong in May 2014 when water bills spiked for the 141 Ave. property.

First she discovered the locks had been changed — and then peeked through the windows to find her furniture and family heirlooms were missing.

She eventually found out an ex-con named Darrell Beatty was living inside with his two sons and a pit bull — but the cops said they couldn't do anything because of the phony deed.

Merin had to go to court to get the property back in her name and to get Beatty evicted. He was eventually booted in late 2015. Merin said he did $80,000 worth of damage to her property, and destroyed almost $500,000 in family heirlooms.

"My family worked, came here with nothing to build a life and all their achievements, all their effort was in that house that was left to me and now it's gone. It's all gone," Merin said, mentioning that her parents emigrated to the U.S. from Russia in the early 1900s. "My life will never be the same."

Beatty and his lawyer declined comment after the hearing before Justice Barry Kron.

"He has shown no remorse for what he has done to me. It has been devastating for me," Merin said.

Georgia Man Faces Elderly Exploitation, I.D. Theft Charges For Allegedly Using Forged Deed To Snatch & Flip Title To Property Housing Salvage Operation For $1.2 Million; 85-Year Old Victim Says She Was Merely Renting Business To The Defendant

In Forest Park, Georgia, WSB-TV Channel 2 reports:

An 85-year-old woman says her business and property were stolen from her. She told Channel 2’s Tom Jones that if it wasn't for a code enforcement citation, she would have never known a man took her property.

Barbara Bell says was cited for tires on her property.

“He had stolen my property and forged my name,” Bell told Jones.

Investigators say Asif Mohammad forged her name on a document transferring her property to him. “I trusted him. But I wish I hadn't,” Bell said.

Bell told Jones she was renting a salvage business to Mohammad. Then in March, she says, a code enforcement officer cited her for tires on her business property next door. That's when she asked if everything was OK at the salvage business.

They also stopped the woman's bank, credit card, and mortgage payments, causing her home to be foreclosed upon.

The victim had no idea; she suffers from dementia and Alzheimer's disease.

Neighbor Lamar Brady said he and his son, Josh tried to help the widow who used to live across the street as much as they could.

"We came over, cleaned the house, made sure she had dinner every night, made sure she had medicine," Brady said. "They were starving the poor woman to death. She was going to different neighbors' houses, begging for food.... She trusted them, 100-percent."

Deputies said a victim's advocate was working with the woman to help put her life back together. Meanwhile, the suspects were arrested and booked into the Land O' Lakes Detention Center on $20,000 bond.

Abuse Of POA To Pocket $19K Home Equity Loan Among Allegations Against Illinois Woman Accused Of Stealing Over $50K From Her 85-Year Old Dementia-Stricken Mom

In Quincy, Illinois, the Quincy-Whig reports:

A Quincy woman who police say misused more than $50,000 of her mother's money last year will go to trial in a financial exploitation of the elderly case.

Patricia A. Tipton, 58, pleaded not guilty to two felony counts [] in Adams County Circuit Court after Judge Mark Drummond found there was enough evidence to hold Tipton's case over for trial. Her case was placed on the September jury docket. If convicted, Tipton could be sentenced to between four and 15 years in prison. She would be eligible for probation, which could be for as long as 48 months.

Quincy police Detective Adam Gibson, who also is the Quincy Police Department's elder services officer, testified Tuesday that he began to investigate Tipton after he received a call from Mercantile Bank in February. Gibson said a bank employee said Tipton had been depositing large sums of money from a State Street Bank account belonging to Stella J. Stinnett, 85. Gibson said Tipton is Stinnett's daughter and has had power of attorney for Stinnett since June 2011.

Gibson said a review of bank records indicated that Tipton had deposited $24,000 from Stinnett's account into her account. Tipton also took out a home equity loan in Stinnett's name for $19,000, Gibson said, and numerous bills, including several credit cards and more than $4,000 in cellphone payments, were made by Tipton from Stinnett's account dating back to July 1, 2015.

Gibson said he interviewed Stinnett at her home Feb. 29. Stinnett was "extremely confused" when he spoke with her, he said, and she told him she was not aware that Tipton was spending the money. Gibson said Stinnett, who was diagnosed with dementia in 2013, was certain that Tipton would not misuse her money.

A former Coconut Creek lawyer began serving a 10-year state prison term [] for stealing more than a million dollars from property owners who'd lost homes in foreclosure transactions in 11 Florida counties, authorities said.

"There is no excuse for my behavior," said Nicholas Steffens, 37, as he read a statement to Broward Circuit Criminal Court Judge Michael I. Rothschild.

In March, Steffens pleaded no contest to five counts of grand theft as part of his negotiated sentence.

Steffens stole approximately $1.5 million over three years from about 50 people who owned homes in Florida, including in Palm Beach, Broward and Miami-Dade counties, Assistant State Attorney David Schulson said.(1)

Some victims have yet to file claims or have not yet been located or have died, and next of kin have not been found, he said.

When a foreclosed property was sold, sometimes a portion of those proceeds, called surplus mortgage foreclosure funds, were owed to the former homeowners. Steffens was entrusted to find those persons and pay them what they were due.

"He made absolutely zero effort to locate anyone and stole the surplus money," Schulson said. "The most outrageous thing is he did it all over the state. He disgraced the legal profession."

***

Present to hear the judge sentence Steffens to a decade behind bars, 20 years' probation and to make full restitution to victims was Carmen Barbara of Pembroke Pines. She was owed $12,717, according to a court document.

"In the past two or three years, I lost my husband, I lost my house and then I found out that this happened," Barbara said. "That's what I find the most heart wrenching, is that he was taking advantage of people at their worst possible times, when they lost their homes."

***

The Florida Bar said in February that the State Supreme Court granted Steffens' request for a disciplinary revocation of his license, which is equivalent to disbarment.

Schulson said anyone who thinks they may be a victim should call him at 954-831-8056.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:

This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.

There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.

This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression. [...] The fact is, however, that theft of client property is not an insignificant or isolated problem within the legal profession. Indeed, it is a hounding phenomenon nationwide, and probably the principal reason why most lawyers nationwide are disbarred from the practice of law.

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(1) The Clients' Security Fund was created by The Florida Bar to help compensate persons who have suffered a loss of money or property due to misappropriation or embezzlement by a Florida-licensed attorney.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

A law firm representing a residential mortgage lender in connection with foreclosure proceedings can be liable to a borrower for excessive attorney fees charged in violation of the Pennsylvania Loan Interest and Protection Law, the Pennsylvania Supreme Court has ruled.

"In the statute at issue here, the legislature's use of the term 'person' in Section 502, which it defined to include actors other than residential mortgage lenders, suggests an intent to hold accountable any of the entities that might have engaged in the abusive practices specifically prohibited in Article IV," Saylor wrote. "The plain language of the statute does not exempt attorneys, debt collectors, or any other third parties from liability in this regard."

***

Mary Glover filed a lawsuit against Udren Law Offices and EdElla and Eric Johnson sued Phelan Hallinan & Schmieg, both alleging violations of Act 6. They said the law firms charged unearned and excessive attorney fees in connection with the mortgage foreclosure proceedings in which the plaintiffs were involved.

***

AARP, the National Consumer Law Center and Community Legal Services of Philadelphia filed as amici curiae in the case, and argued that under the Superior Court's interpretation, "the prohibitions of Act 6 are too easily evaded by residential mortgage lenders who can—and regularly do—hire attorneys and other third parties to conduct debt collection and foreclosures," Saylor said.

Madison Circuit Court Judge Thomas Newman Jr. [] sentenced Roger Shoot to 8 1/2 years of probation for real estate practices that prosecutors said were intentionally designed to take advantage of unsuspecting buyers.

As part of a plea agreement approved by Newman, Shoot pleaded guilty to to three Class D felony Counts of theft, and one Class C felony count of forgery.

He will be required to pay court costs and restitution of nearly $36,000. Newman also ordered the Madison County Probation Department to investigate whether an elderly couple who invested in real estate with Shoot is owed any money.

***

Much of the hearing focused on whether Shoot should serve time in prison.

Deputy Prosecutor Andrew Hopper argued for a four-year prison term followed by a period of probation.

"We're familiar with bank robbers and drug dealers and we have a notion of what an appropriate type of accountability looks like for them," Hopper said in his arguments. "But this is very different The task of determining what is just and fair is much more complex."

Shoot carried out criminal activity under a cloak of respectability, Hopper said.

"He uses the tools of a licensed real estate broker. He uses contracts, and notaries, and the complexities of a professional practice to prey upon members of our community who are working to make their lives better by owning a home, trying to make Anderson and Madison County a better place," Hopper said.

Shoot stole homes out from under people, and then didn't pay property taxes that were owed to the county, according to Hopper.

"His crime can be summed up as the systemic destruction of a community, home by home, and family by family," Hopper concluded. "It is that cloak of respectability, your honor, that makes him more dangerous than the street criminal. His behavior is wrapped up in what is otherwise legitimate business dealings, making it nearly impossible to detect.

"For years, he has swindled the treasurer, the auditor, the recorder, the taxpayers and an untold number of homeowners. We know this is just the tip of the iceberg. But don't let him con the courts, too," Hopper argued.

"He must be held accountable for the vastness of his crime, and an appropriate sentence, your honor, calls for four years in the Department of Correction followed by a period of probation."(1)

A Madison County deputy prosecutor is asking the Indiana Attorney General's Office to review at least 15 cases involving local real estate broker Roger Shoot following comments made by Shoot during his recent sentencing hearing. Originally charged with 32 felonies in connection to his business practices, Shoot pleaded guilty to three counts of Class D felony theft, and one count Class C felony forgery as part of a plea agreement.

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(1) As a reminder to those lowlifes and others who mistakenly assume that these apparent ripoff deals are nothing more than civil cases, it is clear that all the sophisticated paperwork in the world (ie. business/purchase contracts, leases, closing statements, etc.) isn't enough to permit scammers to insulate themselves from criminal prosecution when they target their victims with legitimate-looking business propositions when screwing their victims over. Criminal prosecutors have the authority to "pierce through" such attempts to disguise a blatant criminal real estate ripoff as a common, legitimate business deal.

Clear precedent exists for such a "pierce through" approach to overcome any objections that will certainly arise when the scammers make the argument that the arrangement was just a civil transaction that, if challenged, should be done with a civil lawsuit, not a criminal prosecution. See, for example:

The simple answer to this argument is that "The People prosecuting for a crime committed in relation to a contract are not parties to the contract and are not bound by it. They are at liberty in such a prosecution to show the true nature of the transaction." (People v. Chait, 69 Cal.App.2d 503, 519 [159 P.2d 445]; People v. McEntyre, 32 Cal.App.2d Supp. 752, 760 [84 P.2d 560]; People v. Jones, 61 Cal.App.2d 608, 620 [143 P.2d 726]; People v. Pierce, supra, p. 605.)

Defendant argues that the deal with each "seller" was a civil transaction; [...] Cloaked in the draperies of his corporation and pretending to act in its behalf, he boldly approached his unsuspecting victims.

[***]

Although each deal in its incipiency bore the color and trappings of a normal, civil contract, yet when subjected to a postmortem it exhaled the stench and disclosed the carcass of a fraud. (People v. Epstein, 118 Cal.App. 7, 10 [4 P.2d 555].) There appears no sign of good faith at any turn. Each taking and appropriation was a grand theft.

The use of the corporate name and the promises made in accomplishing his purpose were a camouflage of such common variety that no excess of genius was required to discern the fraud. Parol evidence of all that occurred was admissible to show the intention of defendant. (People v. Robinson, 107 Cal.App. 211, 221 [290 P. 470].)

Payment-Skimming Real Estate Operator's Bankruptcy Leaves Residents In Over 100 Homes Hanging In The Lurch; Use Of Lease/Options, Wrap Around Mortgages To Peddle Properties To Novice, Credit-Weak Homebuyers Leaves Them In Fear Of Being Foreclosed Out From Under By Unpaid, Undisclosed Mortgage Holders

In Marion County, Florida, the Ocala Star-Banner reports:

As first-time homeowners, Angela and Luis Funez feel like they did everything right.

They chose a three-bedroom ranch in Silver Springs Shores that was financially within their means. They more than maintained it, sinking somewhere around $10,000 into improvements like tile floors and remodeled bathrooms over a six-year period. And they paid their monthly mortgage religiously.

“We always paid on time,” Angela Funez said. “Always.”

So they never expected to find themselves where they are today: waiting for word on whether a foreclosure will force them out of the house they call they’ve been calling home since 2010.

Theirs is one of more than 100 homes in Marion County on which banks have foreclosed — or are threatening to foreclosure — following a declaration of bankruptcy by Francis and Jo Billy Frick.

The Fricks had been managing properties and financing buyers under F&C Developers, F&J Developers and F&F Quality Home Builders since 1999, according to court documents. By February 2015, when they filed for bankruptcy, they indicated in filings that they had interests in 131 rental properties throughout Ocala.

What the Fricks were not disclosing to renters and renters-cum-buyers like the Funezes, who have held the title to their home since 2012, was that they themselves continued to hold mortgages against the properties. That meant that when the the court converted their bankruptcy filing to Chapter 7, meaning the Fricks would have to liquidate their assets, tenants and homeowners found themselves scrambling.

“It was many sleepless nights,” said Ana Sweet, who had been renting through the Fricks, while pursuing an option to buy, when news of the bankruptcy and impending foreclosures hit.

She and her husband bought their home at auction last summer. They estimate they lost $13,000 when their option to buy through the Fricks fell through.

“That figure has stuck in my head very well,” Ana Sweet said.

Casandra Barkley, who had been renting through the Fricks without putting money toward purchasing the home outright, likewise said she’d been shaken.

“I was almost homeless,” said Barkley, who remains in her home with a new landlord. “I didn’t have anywhere to go.”

The financing scheme at play at the Funezes' home and 33 others is known as a wraparound mortgage.(1) In this case, it means that an existing mortgage persisted while another was taken against the homes.

Raymond Andrews, president of Prime Mortgage Group, said that because a typical mortgage includes a due-on-sale clause, indicating that the mortgage must be satisfied when the holder of the mortgage sells the property, wraparound mortgages are not common. (Prime Mortgage Group, which is based in Ocala, is not involved in the Frick mortgages.)

The Funezes case stands as a clear example of how this played out. Court records indicate that the Fricks picked up the property by warranty deed in 2009 and used it as collateral for financing through Central Florida State Bank. (CenterState Bank of Florida later picked up Central Florida’s mortgage.)

The Funez family arrived in 2010. They rented for two years while pursuing an option to buy, and took ownership of the home through a warranty deed in 2012.

The couple financed through the Fricks, so they paid their mortgage to the Fricks' office each month. They tried to refinance in 2014, they said, hoping that their improved credit would qualify them for a lower interest rate through a traditional mortgage lender. But the Fricks refused, a decision the Funezes said they didn’t understand --- until bankruptcy proceedings revealed the other mortgages against their home.

Wraparound mortgages are legally legitimate, according to two attorneys representing homeowners who purchased through the Fricks, and would have been revealed in a title search on the property. But that’s not an obvious step for the type of homeowners that the Fricks were attracting: often first-time buyers and buyers without the favorable credit scores that would have qualified them for traditional mortgages.

In his objection to the entry of the Fricks' bankruptcy discharge, which is still pending even as many of the homes involved are now locked tight or under new owners, U.S. Trustee Guy Gebhardt alleges that the couple deliberately took advantage of their clients. The motion alleges that the couple lured “unknowing and generally unsophisticated” tenants and buyers into leases with options to buy.

Knowing that their tenants’ and buyers’ credit put them at a disadvantage, Gerbhardt alleges, the Fricks marked up their properties above market value.

They also included charges for real estate taxes and property insurance in monthly rents, according to the motion. These sums were not placed in escrow accounts; around 100 of the properties showed at least one year of unpaid taxes.

The Fricks did not respond to multiple requests for comment.

The U.S. trustee’s assessment is in line with what the Sweets said they experienced. The couple had moved into their home in 2010, after moving to Central Florida in search of better weather and a lower cost of living than they’d had in Massachusetts. Ana Sweet primarily supports the family as a medical assistant, she said, so financing through the Fricks seemed like a financially feasible path toward home ownership.

“It gave us that extra chance to come up with the down payment to be able to purchase the house,” she said. It wasn’t until later that they realized that chance had put them on track to pay significantly more than the market value of their home.

The Sweets moved in with a $3,500 down payment. They agreed to pay an extra $100, on top of their $750 monthly rent, toward their option to buy. Ana Sweet figures they were within $1,000 of taking ownership of the home when they received a letter explaining the bankruptcy.

“My heart fell to the floor,” she said.

Across the neighborhood, Tony and Betty Dechaves knew they were in trouble when a sign appeared in their yard. They, too, had been renting while pursuing an option to buy. They figure they lost some $5,000 when the Fricks lost the home in bankruptcy, between a $3,000 down payment and around $2,000 in money paid toward their option to buy.

Unlike the Sweets, to whom they’re related by an ex-marriage, they weren’t able to arrange the loan they would have needed to buy the home outright at auction.

“We were ready to go,” Tony Dechaves said. He’d gone so far as to pull up the plants he’d recently put in the front yard.

They later learned that the new owner, who had purchased the home at auction, would to let them stay as renters. They said they’re reluctant to try an option to buy again.

For Barkley, the experience has made firm her resolve to purchase a home herself. Once she began to notice other Frick renters moving out of the neighborhood, she said she realized why the couple wasn’t returning her calls requesting maintenance on her stove. She packed up her own house, lining her living room end to end with boxes, waiting for word that it was time to clear out.

She didn’t know where she would go when that happened. With three children and a grandson, she said, she didn’t think nearby relatives could put her up if they wanted to.

“I want my own house,” she said, vowing to never let herself or her children go through the nerve-wracking experience again.

At the Funez home, the family is hoping that their attorney, Stanley Plappert, can arrange for them to stay where they are. They’ve worked hard to build a good life for their children, they said, and don’t want to have to watch their teenagers pack up their rooms.

These devices, along with their "kissin' cousins" - the lease/option, lease/purchase, rent-to-own, etc. arrangements, are often used as the financing devices of choice for unscrupulous real estate operators when attempting to unload dilapidated, defective and otherwise unmarketable homes onto unwitting, unsophisticated (often frst-time) homebuyers, particularly those with crappy credit.

A Georgia property management company that allegedly included illegal terms in its leases and rented some homes without hot-and-cold running water in Maryland reached a settlement with the Maryland Attorney General's Office to pay restitution and fines and comply with state law.

Atlanta-based Homes Direct Inc. had at least five properties in Baltimore, according to the settlement agreement.

As part of the settlement, neither Homes Direct nor its owner Cortland Plichta admitted wrongdoing and the attorney general's office ended its investigation into the company's rental practices. Plichta did not respond to requests for comment.

The company and Plichta allegedly included clauses and fees in leases that are illegal under Maryland law, according to the settlement agreement. For example, it charged late payments in excess of 5 percent and failed to refund security deposits or properly store the deposits.

According to the settlement agreement, Homes Direct targeted financially distressed consumers who were unable to qualify or afford traditional mortgages by offering "a lease to purchase program."

Some properties did not have hot or cold running water and the company did not comply with state lead laws, though no lead was found in its properties, said Christine Tobar, a spokeswoman for the attorney general.

"All tenants in Maryland have the right to hot and cold running water," said Maryland Attorney General Brian E. Frosh in written statement. "All tenants have the right to know their children are not exposed to lead paint poisoning."

Homes Direct will pay $8,500 in penalties and fees to the state as part of the settlement. Three tenants of Homes Direct will receive $1,500 each. The company could pay more if other tenants file valid claims, according to the settlement.

Home Direct also agreed to enter into new leases with its Maryland tenants that abide by state law and to repay security deposits as part of the settlement.

Building and Land Technology’s Harbor Point development has agreed to a $40,000 settlement over allegations of discrimination from the Connecticut Fair Housing Center.(1)

BLT, Harbor Point and Prime Realty agreed in November to settle a complaint regarding housing discrimination based on race without admitting liability, the center said in a statement [this week].

In 2014 clients Tamica McKune and Matthew Notice reported to the center instances of racial discrimination in their dealings with BLT, Harbor Point and Prime Realty, naming the high-end Yale and Towne building specifically.

McKune and Notice told the Connecticut Fair Housing Center that as affordable housing applicants they were not permitted to tour apartments prior to the submitting applications. These specific complaints came among several other similar reports that year.

Upon investigation, the center said it found significant evidence of disparate treatment between below market and market rate applicants and differential treatment based on race, even among the affordable housing applicants.

The center uncovered one instance an African American prospective affordable housing applicant who was denied a showing by Harbor Point, while a white prospective below market rate applicant was show a model unit without issue.

This spurred the Connecticut Fair Housing Center to file a complaint with the Department of Housing and Urban Development, alleging that the companies violated the Fair Housing Act’s prohibition on discrimination based on race.

(1) The Connecticut Fair Housing Center is a nonprofit fair housing organization working statewide, providing investigative and legal services to Connecticut residents who believe they have been the victims of housing discrimination. The Center also provides education and conducts outreach on fair housing and fair lending issues throughout the state.

Civil Rights Feds $queeze Developer, Architect For $160K To Resolve Allegations That Pair Violated Fair Housing Act By Designing, Building Two Neighboring Condo Complexes With Variety Of Features That Made Them Inaccessible To Persons With Disabilities

From the U.S. Department of Justice (Washington, D.C.):

The Justice Department announced [] that Dean Windham and Milton Studer, a real estate developer and an architect in Ohio, as well as several companies that they owned and controlled, have agreed to pay a total of $160,000 to resolve allegations that they violated the Fair Housing Act by designing and constructing two neighboring condominium complexes in Hartville, Ohio, with a variety of features that made them inaccessible to persons with disabilities.

Under the terms of the agreement, which must still be approved by the U.S. District Court for the Northern District of Ohio, the defendants will pay $100,000 to current condominium owners at Windham Bridge Condominiums and Hampton Court Condominiums who choose to make accessibility modifications to their units.

These modifications include:

eliminating steps and excessive slopes in the walkways to the front entrances of their units;

widening doorways;

removing or lowering thresholds;

installing removable cabinets in kitchens and bathrooms to increase maneuvering space for wheelchair use and relocating toilets, showers and sinks to provide access to a wheelchair user.

The lawsuit arose out of complaints that Tri-County Center for Independent Living and the Fair Housing Advocates Association originally filed with the U.S. Department of Housing and Urban Development (HUD). After investigating the complaints, HUD determined that the defendants had violated the Fair Housing Act and referred the matter to the Justice Department.

Michigan Trial Judge: OK For Amish Man To Disregard State Building Code When Constructing Home, Other Structures; Forced Compliance Would Violate His 1st Amendment Right To Freely Exercise His Religion

The Amish will not have to abide by the requirements of the Michigan Residential Building Code as they construct new structures in Chippewa County, according to a recent ruling from visiting Judge Harold Johnson in the 50th Circuit Court.

The defendant in this case, William Miller, sought an exemption asserting compliance with the code would violate his First Amendment right to freely exercise his religion. He further argued, according to Johnson's written opinion issued on June 6, that denial of the exemption would be both a violation of the Fair Housing Act and a violation of the Religious Land Use and Institutionalized Persons Act of 2000.

The building code requirements include provisions for electric and plumbing systems, indoor bathrooms, modernized kitchens and additional requirements for electronic devices such as smoke alarms and carbon monoxide detectors.

"The court is of the opinion the denial of an exemption is a violation of the Religious Land Use and Institutionalized Act of 2000, 42 U.S.C Sec 2000cc (a) (1)," wrote Johnson before outlining his rationale for handing down this decision.

Citing Miller's membership to the Old Order of Amish teachings and strict adherence to the conservative Ordnung which stresses separation from the outside world and the practice of self-sufficiency in the construction of houses, barns and structures, Johnson determined that denying an exemption would be a substantial burden to Miller's beliefs in the free exercise of his religion.

Johnson also noted that a violation of the Ordnung could result in church discipline up to and including excommunication, essentially showing that Miller could be kicked out of his church for following the building code.

County Administrator Jim German said it is likely the prosecutor's office will seek a reconsideration of the motion, but barring a change of mind by Judge Johnson the ruling will stand. The only other option, German explained, would be to appeal the ruling, but that would require the Chippewa County Board of Commissioners to approve a measure to pursue this matter and sign off on unspecified legal costs for the appellate court proceedings.

"We've done everything we could per the law," said German. "All the county is trying to do is follow the legal opinions that are given to us."

Anxiety/Depression-Suffering Teenage Girl's Four Therapy Chickens Dodge Eviction Ax; Fair Housing-Fearing Town OKs Home Residency For Two Hens & Two Roosters Provided Family Boots Rest Of Flock (Once Numbering About Two Dozen)

In Western Pennsylvania, the Pittsburgh Tribune-Review reports:

Hempfield Township's zoning hearing board decided to spare a teenage girl's four pet chickens from eviction, as long as her parents give up the other chickens that live at their home.

Sarah Downing, 15, was not at [the recent] hearing, but her parents, David and Sharon Downing, were. They told the board that Sarah's feathered friends — two hens and two roosters — are emotional support animals and vital to her mental well-being.

“These are her companions. She often has them cuddle with her in her bed while she's watching TV or doing homework,” David Downing said.

Sarah suffers from anxiety and depression, her father said. The four chickens live in her bedroom, and she turns to them for comfort when she's overwhelmed.

The Downings used to have about 25 chickens living at their residence, mostly in coops outside.

In April, neighbors complained about the birds, and the township issued a zoning violation notice. Chickens are not allowed in the village residential district where the Downings live.

The Downings have reduced their flock since receiving the notice. They now have fewer than 10 chickens at the home, David Downing said, and would be willing to give away all but the four that live with Sarah.

Nancy Kasparek, the Downings' neighbor who first wrote the township to complain about the chickens, voiced her complaints at the meeting.

“Chickens were running all over my yard, on my deck, crapping everywhere,” she said.

However, she said things have gotten better since the Downings found new homes for most of their birds, and she has no complaints with Sarah keeping her four pets.

“I love that little girl,” she said.

Sarah would “spiral into depression” if she had to give up her four pets, her father said.

“It would be a very dark day for her, and very hard for her to rebound from this emotionally,” he said.

After taking testimony and questioning the Downings for more than an hour and a half, the board decided to let Sarah's chickens stay, with a few conditions.

The Downings registered three of Sarah's chickens after receiving the township's violation notice, and David Downing said they plan to register the fourth soon. The registry is run by a private company that requires applicants to submit a letter from a therapist to place their animals on the list.

Additionally, the board said the Downings are not allowed to breed the chickens, or sell their eggs. The chickens must be kept in a pen when they are taken outside.

Sharon Downing said she doesn't mind finding new homes for her family's other chickens.

“We're very happy with the outcome. The whole time, we were looking out for the interests of our daughter,” she said. She began to cry as she called Sarah to tell her the news. “We won for you, baby,” she said on the phone.

(1) The National Service Animal Registry appears to be a private, Internet-based outfit that, as of the date of this post, is apparently peddling a Service Animal Certification Kit that purports to register emotional support animals for people with emotional or psychological disabilities. Based on the content of its website, one may get the impression (correct or otherwise) that this registration bestows some form of "official status" on an animal that might thereby make it easier for an emotional support animal to be "allowed to fly in the cabin of an aircraft with their disabled handler and to qualify for "no pet" or "limited pet" housing." Whether it actually does or not may make for an interesting topic of discussion.

The Upending Of "No-Pet" Policies By Tenants' "Emotional Support Animal" Requests: "What Was A Drip, Drip, Drip Is Now A Flood," Says One Attorney Representing Penalty-Fearing Landlords

In New York City, DNAInfo New York reports:

[T]he number of requests for emotional support animals — or ESAs — in pet-free buildings has ballooned over the past few years, lawyers and brokers said. Landlords are fearful of potentially hefty fines if they contest a pet’s presence while residents are now feeling more emboldened.

It’s become a bigger issue as websites now make it as easy to become licensed for an emotional support animal as it is to become a minister to officiate your friends’ wedding, many say.

A few sites, for instance, promise an ESA letter from a registered therapist within 72 hours of completing a phone interview. They only require you to pay $125 if you meet the diagnosis of such emotional disabilities as anxiety, depression, panic attacks, personality disorder or post-traumatic stress disorder.

Another — which costs $140 for a letter with an additional $49.50 for overnight shipping — states that if you qualify, “you will then be given your prescription letter which allows you to fly with your ESA, and live in housing where pets are typically not permitted.”

Real estate attorney Sherwin Belkin, of Belkin Burden Wenig & Goldman, said he gets multiple calls every week from landlords across the city asking how to field requests for emotional support animals.

"What was a drip, drip, drip is now a flood,” he said.

A tenant at a Midtown East building, for instance, recently got the go-ahead for an emotional support animal — after a lot of “back-and-forth” with the landlord — and within two weeks, two more tenants from the building submitted requests for such animals, Belkin said.

“If a tenant comes forward with what seems like a legitimate reason, the owner has to consent. You’re not allowed to make deep inquiries because it’s considered a violation of privacy,” Belkin said, also noting that under the city’s pet laws, a landlord can’t do anything about a pet if the landlord knew or should have known about the animal living in the building but failed to take action for 90 days.

Belkin — himself a dog owner — said he was unaware of the ESA evaluation letter websites until a few weeks ago when he started poking around.

He was surprised by the ease with which one could possibly be obtained.

“It struck me that these questions are intended to be as coverall as going to the daily newspaper and reading your horoscope. They’ll apply to everybody,” he said. “This has now created a significant problem in buildings, which is far beyond what anyone intended in creating the category of ESA.”

CBC News: Betrayal of Trust (A CBC investigation reveals how lawyers across Canada have misappropriated and mishandled clients money, to the tune of tens of millions of dollars, or sometimes even charging vulnerable people top dollar for shoddy services)

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